A new class of palladium nanoparticles encapsulated in an organic crystalline salt matrix Pd@F2 (A-2) was developed. Matrix A-2 was readily prepared by mixing an aqueous solution of the tetrasodium salt of tetraphenylmethane-tetrasulfonate and the PdCl4 salt of protonated tetrakis(4-aminophenyl)under hydrogen in water. Matrix A-2 contained 17–20 % of palladium and was not pyrophoric. The average size of the palladium metal particles was 7 nm. Matrix A-2 could be used as an efficient heterogeneous catalyst for the reduction of acetylene derivatives and had activity similar to that of Pd/C. The catalyst could be recovered and reused several times with just one four-hundredth of the palladium leaching after the first cycle. The reduction of diphenylacetylene could be selectively stopped at the cis-stilbene stage after one equivalent of hydrogen was absorbed. The same selective conversion could also be accomplished with terminal acetylenes. Matrix A-2 reduced aldehyde and epoxide groups very slowly which allowed the selective reduction of the acetylenes in the presence of aldehydes. This behavior contrasts with that of Pd/C which reduces both aldehyde and acetylene groups simultaneously. A model, suggesting the selective imbedding of the aldehyde groups in the organic F2 matrix of A-2, isolating them from the palladium active sites, explains the observed phenomena. © 2022 Wiley-VCH GmbH.